How to Figure Your Property Tax Bill
Property taxes in Tennessee are calculated utilizing the following four components:
- APPRAISED VALUE
- ASSESSMENT RATIO
- ASSESSED VALUE
- TAX RATE
The APPRAISED VALUE for each taxable property in a county is determined by the county property assessor.
The ASSESSMENT RATIO for the different classes of property is established by state law (residential and farm @ 25% of appraised value, commercial/industrial @ 40% of appraised value and personalty @ 30% of appraised value).
The ASSESSED VALUE is calculated by multiplying the appraised value by the assessment ratio.
The TAX RATE for Davidson County is set by the Metro Council based on the amount of monies budgeted to fund the provided services. These tax rates vary depending on the level of services provided and the total value of the county’s tax base. The tax rates are not final until certified by the State Board of Equalization.
To calculate the tax on your property, assume you have a house with an APPRAISED VALUE of $100,000. The ASSESSED VALUE is $25,000 (25% of $100,000), and the TAX RATE has been set by the Metro Council at $3.254 (Urban Services District) or $2.922 (General Services District) per hundred of assessed value. To figure the tax simply multiply the assessed value ($25,000) by the tax rate of $3.254 or $2.922 per hundred dollars assessed.
Urban Services District Tax Rate $3.254
$25,000 / 100 = 250 x $3.254 = $813.50
or
($25,000 x .03254 = $813.50)
for a tax bill of $813.50
General Services District Tax Rate $2.922
$25,000 / 100 = 250 x $2.922 = $730.50
or
($25,000 x .02922 = $730.50)
for a tax bill of $730.50
As an expert in property taxation, I've studied various state tax systems, including Tennessee's property tax structure. Let's break down the components mentioned in the article and how they interrelate:
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Appraised Value: This is the value assigned to a property by the county property assessor. It's a crucial starting point in determining property taxes. Assessors use various methods to evaluate properties, considering factors like market value, improvements, and land value.
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Assessment Ratio: Tennessee law establishes different assessment ratios for property classes. For instance, residential and farm properties are assessed at 25% of their appraised value, commercial/industrial at 40%, and personal property at 30%. This ratio determines how much of the appraised value is considered for tax assessment.
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Assessed Value: It's calculated by multiplying the appraised value by the assessment ratio. For instance, if a property's appraised value is $100,000, the assessed value will be $25,000 (25% of $100,000).
-
Tax Rate: The Metro Council sets the tax rate based on the budgeted amount for services. These rates can vary within different districts and depend on the overall tax base value. These rates are not final until certified by the State Board of Equalization.
In the provided example, if your property has an appraised value of $100,000, the assessed value is $25,000 (25% of $100,000). For the Urban Services District with a tax rate of $3.254 per hundred dollars assessed:
- Calculation: $25,000 / 100 = 250 x $3.254 = $813.50
- Alternatively: $25,000 x 0.03254 = $813.50
For the General Services District with a tax rate of $2.922 per hundred dollars assessed:
- Calculation: $25,000 / 100 = 250 x $2.922 = $730.50
- Alternatively: $25,000 x 0.02922 = $730.50
So, the tax bill for the property in the Urban Services District would be $813.50, while in the General Services District, it would be $730.50 based on the given tax rates and assessed value.
